Caixin
Jul 18, 2020 05:52 AM
FINANCE

Bank of Beijing Banned From Bond Underwriting for Kangde Xin Link

What’s New: Bank of Beijing was ordered to suspend bond underwriting for six months as a penalty for its role in helping Kangde Xin Composite Material Group Co. Ltd., a chronic defaulter, to sell short-term notes.

The bank received a warning from the National Association of Financial Market Institutional Investors, a self-regulatory organization. The industry watchdog accused the bank of failing to perform due diligence and inadequate monitoring after bond issuances.

Background: The penalties for Bank of Beijing were imposed one year after Shenzhen-listed Kangde Xin, a supplier of German automaker BMW AG, was banned from bond sales after massive defaults since late 2018.

Kangde Xin has been placed under multiple investigations for the defaults and related allegations on financial reporting fraud.

Market records showed that since 2015, Bank of Beijing was the main underwriter of five bond issuances by Kangde Xin, raising a total of 4.1 billion yuan ($586 million). All the bonds defaulted.

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.

Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bobsimison@caixin.com)


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